JSC KazMunaiGas Exploration Production said the Ministry of Energy and the Ministry of Finance of the Republic of Kazakhstan has reached a positive decision regarding the company's recent application for recovery of a value added tax (VAT).
The Company filed an application for the VAT recoverability in the amount of 57.4bn Tenge (US$174m), of which the VAT confirmed to be recoverable at this time, amounts to around 24.5bn Tenge ($74m).
This amount has already been received by KMG EP. This VAT claim is related to the accumulated excess for the period of 2012-2015, including the formation of JSC Ozenmunaigas and JSC Embamunaigas in 2012.
KMG EP intends to further engage with the relevant parties to work on the recoverability of the remaining amount.
As previously announced, tax authorities originally refused to recognize VAT amounts as recoverable in 2014.
In the fourth quarter of 2015, the Company created the valuation allowance for the amount of 46.7bn Tenge in its profit and loss statement.
Given the amendments to the Kazakh tax legislation, which were implemented on 1st January 2016, and full support of NC KMG, the Company was able to file an application for the abovementioned VAT recovery again and achieve this positive development.